Nov. 26 (Bloomberg) -- Bombardier Inc.’s CSeries jetliner,
which has won orders from only three customers, is a leading
contender for a contract from SAS Group as the biggest Nordic
airline prepares to add as many as 55 planes over six years.

SAS, already one of Bombardier’s biggest European clients,
is evaluating the CS300 variant of the CSeries, seating 120 to
145 people, Niklas Hardange, the carrier’s fleet-planning chief,
said in an interview at its headquarters in Stockholm.

“Bombardier is the one offering the newest technique, and
has a plane that’s a lot more fuel efficient than Airbus and
Boeing have today,” Hardange said yesterday. “If the CSeries
keeps its promises it’ll be a very successful product.”

SAS is weighing the single-aisle CSeries against the
competing 737 from Boeing Co. and Airbus SAS A320 family. The
airline plans to phase out 37 older 737s and Boeing MD-80s over
the next few years while adding capacity to meet anticipated
annual passenger growth of 4 to 6 percent through 2016.

Montreal-based Bombardier has so far secured 90 orders for
the CSeries; 30 from Germany’s Deutsche Lufthansa AG, which is
buying the planes for its Swiss unit, 40 from Indianapolis-based
Republic Airways Holdings Inc. and 20 from Lease Corp.
International Aviation.

CRJs, Q-Series

SAS and its units own 12 Bombardier CRJ900 regional jets
and 28 Q-series turboprops, including seven Q400s. The carrier
got more than 1 billion kronor ($143 million) in compensation
from the Canadian company and Goodrich Corp. in 2008 after Q400
landing-gear problems caused three crash-landings in six weeks.

The CSeries model is attractive because of its lighter
composite-based construction and more fuel-efficient engines
from United Technologies Corp.’s Pratt & Whitney unit, Hardange
said. Still, the technology is untested and the CS300 probably
won’t be available to SAS until 2014, he said.

Bombardier spokesman John Arnone said the company doesn’t
comment on potential customers, while adding that it is
“involved in discussions with many airlines and operators
regarding the CSeries aircraft.”

Buying Boeing 737s would “simplify” the SAS fleet as
there are 83 planes from the Chicago-based manufacturer among
the 193 that the airline currently operates, Hardange said. SAS
is also interested in Airbus’s A320 and A319 variants, he said,
and is looking at the European company’s planned “Neo” upgrade,
which would feature a new, more efficient engine.

Leasing Option

The Scandinavian airline, half-owned by the governments of
Sweden, Norway and Denmark, has yet to decide to what extent it
will buy or rent planes, and is also talking with lessors.

“Historically it’s been better for us to own than to
lease,” Hardange said. “Today we’re not so sure. We’re flexible
and want to grab the best opportunities we can. We’ll do it
gradually and don’t see a big bang ahead of us.”

The fleet-renewal plan comes as SAS is deep into a 7.8
billion-kronor cost-cutting program, and the carrier wants to
improve cash flow and boost credit ratings before committing to
a purchase, which “is not coming tomorrow,” said Sture Stoelen,
its head of investor relations. Selling more shares to help fund
new planes is not an option, he added.

SAS has been unprofitable in all but one of the past 12
quarters after struggling with declining traffic, strikes and
airspace closures following a volcanic eruption in Iceland.

Qatar Airways Ltd. Chief Executive Officer Akbar Al-Baker
said yesterday that Bombardier needs to resolve “commercially
sensitive issues” regarding the CSeries or risk seeing it
eclipsed by Airbus’s re-engined Neo. Pratt & Whitney said Sept.
17 it aimed to iron out a “misunderstanding” that prompted the
Gulf carrier to delay an order for as many as 30 planes.

Bombardier was trading down 0.4 percent at C$4.82 as of
11:24 a.m. in Toronto. The stock is up 0.5 percent this year.

SAS closed 3 percent lower at 22.80 kronor and has declined
55 percent this year for a value of 7.50 billion kronor.